Because the products of firms in a monopolistically competitive market are not homogeneous, the
A) demand curve for the industry is the same for the firm.
B) demand curve for the firm's product is horizontal.
C) demand curve for the firm's product is downward sloping.
D) demand curve for the firm's product is upward sloping.
C
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Producer surplus is the amount a seller receives for a good or service
Indicate whether the statement is true or false
To derive the external balance relationship under high capital mobility and floating exchange rates, an increase in government spending must be followed by
A) an increase in money stock to restore the balance of payments equilibrium. B) a decrease in money stock to restore the balance of payments equilibrium. C) a depreciation of the currency to restore the balance of payment equilibrium. D) a decrease in investment spending to restore the balance of payments equilibrium.
A liquidity trap occurs when
A) any additions to the monetary base are held as cash by people or reserves at banks. B) the Fed increases the money supply, causing the expected inflation rate to rise more than the real interest rate declines, so that the nominal interest rate increases. C) there are runs on banks that are solvent but illiquid. D) the demand for loans increases in a country on the gold standard, so that the monetary supply is not able to increase and interest rates rise dramatically.
A negative cost-benefit ratio means that a program should not be undertaken
a. True b. False